Legal News

Sad But True: Why Companies Skip the Royalties…

Performance rights organizations frequently catch a bad reputation for cracking down on violators – whether the corner coffee shop or a major venue. But beyond the PRO debate, publishers frequently find their content misused across a variety of licensing types (synch and mechanicals included). But why do companies so often forget to cross this ‘t’?

According to Metlawgroup founder David Michail, the reason often has less to do with malevolence and more with miscommunication and process breakdowns between different parties. “The general practice of most agency agreements is to ensure that all IP is owned by the agency so that it can be transferred to the client per the terms of that agreement,” Michail noted.

But when freelancers and additional contracting parties get involved, the risk of copyright violations increase. And compounding the problem is the ever-urgent deadline, a monster that sometimes pushes IP considerations to the side. “In the bustle of [the] day, what easily gets left out of the equation is ensuring that the legal terms and conditions of the services agreement [are] being properly structured into the agency’s process,” Michail continued. “Most likely, copyrights are often overlooked, particularly when dealing with third party subcontractors and freelancers.”

Of course, inside and outside of the agency world, simple ignorance also plays a role. Back to the performance side, PROs sometimes come knocking on the doors of small establishments only to find that an education in performance royalties is the first step. Other times, small businesses question or fight the royalty demands themselves, a stance that typically comes at the expense of songwriters.

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